The 26-year-old has entered the final year of his Hornets deal, and he has no plans of extending his stay with the club.
Hence, he has been sent to train with the reserves, and it appears only a matter of time before he heads for the exit door.
Palace have been in advanced negotiations for Hughes in recent weeks, and they are now poised to land his signature.
Their initial bid of £5 million was rejected by the Hornets, and it was recently reported that Burnley had entered the pursuit.
However, Patrick Vieira’s side are still in the driving seat to sign him after making an improved transfer offer worth £10m.
Palace are ready to pay £7m up front. It is reported that a deal could be completed soon as personal terms won’t be an issue.
Palace released several senior players this summer. They have reduced the average age of the squad further with young and experienced signings.
The club have made five outfield signings this term with the age of 25 and below. At 26, Hughes fits into their transfer policy for the summer.
Hughes is the most experienced when it comes to Premier League football compared to the rest, having previously made 77 appearances.
He would be a solid addition for Palace in the centre of the park with his good work rate and ability to make key tackles and interceptions.
Palace have had a positive transfer window, but they still need to add competition for places before the transfer window closes this month.
With Michael Olise and Eberechi Eze on the sidelines with injuries, they have a weak bench. They had three goalkeepers in the squad against Brentford.
Stats from Transfermarkt.com